What is Third-Party Risk Management (TPRM)?

Third-party risk management, or TPRM, refers to the review, analysis or control of unforeseen circumstances arising from a business’s collaboration with third parties, such as vendors or suppliers. Through this process, enterprises can gain insights and establish procedures to manage potential economic loss.

TPRM should ideally begin with an enterprise identifying any critical third-party relationships that it relies upon for supplies or sourcing. Third-party risk management as a key organizational strategy enables enterprises to optimize performance across a range of supply and demand outcomes.

Learn more about GEP’s supply chain risk management.

Related Terms

What is Tail Spend?What is Taxonomy?What is Third-Party Logistics (3PL)?What is Three Way Match?What is Transaction Costs?